Financial counseling and empowerment: Lansing, MI
MORE ABOUT THE STRATEGY USED IN THIS CASE STUDY Financial education and counseling
At-a-Glance
Summary
After the financial crisis in 2008, Lansing, MI saw significant increases in unemployment, foreclosures, and property tax delinquency. Many low-income families were struggling to pay for essentials, and few families could afford postsecondary education for their children.
To address these challenges, the City of Lansing created an Office of Financial Empowerment (OFE) in 2013. The OFE launched the Financial Empowerment Center (FEC), which provided clients with free, one-on-one financial counseling. Services offered included help creating personal budgets, saving money for the future, accessing affordable bank accounts, and developing strategies to pay down debt. After the FEC demonstrated success, the Office of Financial Empowerment began launching a broader network of public and non-profit programs that aimed to support residents’ financial empowerment. These programs included Lansing SAVE, Bank On, and the OS Reentry program.
Keys to the OFE’s success included integrating services across its financial empowerment programs and with programs operated by partner agencies and its ability to leverage data to demonstrate its impact and build buy-in among decision makers.
Challenges faced by the program included an understaffed Office of Financial Empowerment, the impact of COVID-19 on in-person recruitment and service delivery, and issues engaging younger participants.
Results and accomplishments
$13.8 million
OFE’s Financial Empowerment Center has helped residents reduce their non-mortgage debt by nearly $13.8 million since 2013.
6,933
As of 2024, 6,933 public school students in Lansing have child savings accounts through OFE’s Lansing SAVE program.
$1.2 million
OFE’s Financial Empowerment Center has helped residents increase their savings by nearly $1.2 million since 2013.
Reaching thousands of residents: Since the Office of Financial Empowerment (OFE) launched the Financial Empowerment Center (FEC) in 2013, counselors have reached over 5,579 Lansing residents through more than 16,716 sessions. As a result, Lansing residents have increased their savings by nearly $1.2 million and reduced their non-mortgage debt by $13.8 million.
Increasing savings for postsecondary education: Due to the FEC’s success, OFE expanded its program offerings. Through its Lansing SAVE program, OFE has provided over 8,000 K-6 students with financial education classes. A collaborative effort between the City of Lansing, the Lansing School District, and MSU Federal Credit Union, Lansing SAVE also provides students with savings accounts to help save for postsecondary educational expenses. Currently, the program aims to raise $5 million by 2027, which represents $500 per student.
Building out a continuum of financial empowerment services: OFE has continued to expand its programming as it works toward offering a continuum of financial empowerment services available to residents at all phases of their lives. In particular, OFE launched both the OS Reentry Services Program, which helps formerly incarcerated individuals obtain employment and self-sufficiency, and Bank On, a collaborative effort with local financial institutions to create safe, affordable bank accounts for unbanked residents.
Receiving recognition for its impact: Part of a national network of municipal financial empowerment programs, OFE has been recognized as a model program. OFE regularly partners with national organizations, like the National League of Cities and Cities for Financial Empowerment Fund, to share their experience with other local leaders.
Overview
What was the challenge?
Increasing financial pressures on Lansing residents: In the wake of the 2008 Financial Crisis, many of Lansing’s residents faced major financial challenges. Roughly 40 percent of Lansing residents were low-income, and the unemployment rate doubled to more than 12 percent. Meanwhile, Lansing experienced a 20 percent increase in housing foreclosures in 2011, with 10 percent of the population delinquent in property tax payments.
Higher education increasingly inaccessible: With many families struggling to cover basic costs, few families with low incomes reported having a savings plan for their children's postsecondary education. At the same time, higher education costs continued to rise, making post-secondary education increasingly unattainable for many Lansing residents. In Lansing today, just a quarter of residents 25 or older have a bachelor's degree.
Building capacity to promote financial empowerment: To address these dual challenges, Lansing civic and government leaders launched several public and non-profit programs to support family savings and financial empowerment. These efforts were anchored by the City of Lansing’s Office of Financial Empowerment, which was created in 2013.
What was the solution?
Securing funding to launch financial empowerment programming: In 2013, the City of Lansing secured a three-year, $1.5 million grant from the Cities for Financial Empowerment Fund (CFE Fund). The grant enabled the City to launch the Office of Financial Empowerment (OFE), which would oversee the replication of the CFE Fund’s Financial Empowerment Center (FEC) model.
Offering free, professional financial counseling: The Financial Empowerment Center model provides residents with free financial counseling from trained counseling staff. Residents can receive assistance with creating personal budgets, improving their credit, developing plans to pay down debt, among other services. The FEC is available to any adult; there are no restrictions based on income or life circumstances.
Expanding financial empowerment services: After launching the FEC, the Office of Financial Empowerment expanded its programmatic offerings in collaboration with its community partners. These programs include Lansing SAVE, which creates a children’s savings account for each Lansing public school student; Bank On, which helps Lansing residents open safe and affordable bank accounts; and OS Reentry, a program focused on reducing recidivism among formerly incarcerated individuals.
Developing a continuum of services: OFE’s programs provide a continuum of financial empowerment services for residents to access across their lifetimes, from kindergarten to retirement. Ultimately, OFE aims to develop a “no wrong doors” structure, in which each program is interconnected, and participants are given “warm handoffs” as they transition between them.
What were the key components of the program’s design?
Professionally-trained counselors: As part of the Financial Empowerment Center (FEC) model, all counselors are professionally trained. The CFE Fund provides a rigorous set of FEC Counselor Training Standards for communities, like Lansing, that are replicating the model. These standards ensure that the counselors in Lansing’s FEC program not only have the requisite financial expertise, but are trained on coaching techniques, ethics mandates, strategies to promote socio-economic and cultural understanding, among other areas.
Using rigorous evaluation methods: The FEC model involves careful collection and analysis of data to measure impact and refine program practices. To assist Lansing, the CFE Fund operates a central database, where data on over 200 different metrics are stored.
Providing a public service at no cost: Each of OFE’s programs is offered free of cost, as a public service. This approach ensures that OFE programs are financially accessible to their target populations. The programs are also run by a department within city government, as the City of Lansing is a well-known and credible service provider.
Who were the key stakeholders?
The Cities for Financial Empowerment Fund: The CFE Fund provided a crucial three-year, $1.5 million grant to the City of Lansing, allowing it to launch the Office of Financial Empowerment and its first program, the Financial Empowerment Center.
BOLD Lansing: The OFE partnered with several allied organizations - Lansing SAVE, Lansing Promise, and CapCAN - to launch BOLD Lansing. The initiative creates shared branding and a common entry point for residents interested in the financial empowerment programs offered by these organizations.
Referral partners: The OFE works closely with area nonprofit and government agencies which commonly refer clients to OFE programs. Major referral partners include the Ingham County Parole Office, 54-A District Court, Capital Area Housing Partnership, and LEAP.
What factors drove success?
Integration across programs: OFE works to make connections between its financial empowerment programs, where appropriate. As such, participants in one program may access services from another, amplifying the support they receive. For example, the OFE found that Lansing SAVE students whose parents use FEC services have account balances that are 90 percent higher, on average, compared to those who do not have a second programmatic connection.
Collaboration with allied programs: OFE also works to build connections between its internal programs and financial empowerment programs offered by external partners. Most prominently, BOLD Lansing enables shared marketing and more seamless client referrals across two OFE programs - FEC and Lansing SAVE - and two outside postsecondary access and success programs, Lansing Promise and the Capital Area College Access Network.
Leveraging data to build trust: Since its launch, the OFE has carefully tracked outcome data, such as reductions in client debt, to measure the effectiveness of and refine its programs. This enables the OFE to build a strong, evidence-based case when seeking funding from the city and private donors.
What were the major obstacles?
Limited staffing capacity: Lansing’s Office of Financial Empowerment was originally launched to house a single program, the Financial Empowerment Center. As the OFE demonstrated impact, it grew to house three other financial empowerment programs: Lansing SAVE, Bank On, and OS Reentry. Initially, the OFE’s significantly expanded portfolio did not come with a commensurate increase in staffing, placing constraints on its ability to grow each program. However, the OFE is poised to add several staff members in 2024, giving it needed additional capacity.
COVID hampers in-person recruitment and service delivery: The COVID-19 pandemic forced OFE to deliver much of its programming virtually, which proved especially challenging for programming targeted toward K-12 students. With BOLD Lansing originally planning for a significant in-school marketing campaign, the pandemic limited the impact of this effort.
Adapting to serve younger participants: Working with younger participants, primarily through the Lansing SAVE program, required OFE to iterate and adjust its approach to best serve this population. For example, when OFE noticed that student participants missed appointments at unusually high rates, staff began texting and/or calling these clients with appointment reminders.
Timeline
In the wake of the Great Recession, Lansing families face unprecedented barriers to economic mobility: unemployment doubles to 12.3 percent, 40 percent of residents live in poverty, and home foreclosures rise by 20 percent -- all while the Michigan state legislature makes significant cuts to social services, the EITC, and energy assistance programs. Local government and civic leaders zero in on financial empowerment programming focused on higher education as a potential strategy to mitigate the crisis.
Jonathan Mintz, who previously served as Commissioner of New York City’s Department of Consumer Affairs under Mayor Bloomberg, launches the CFE Fund with support from Bloomberg Philanthropies. The CFE Fund provides funding and technical assistance to select mayors and their teams to develop, launch, replicate, and test evidence-based financial empowerment strategies.
After responding to the CFE Fund’s RFP to replicate its Financial Empowerment Center model, Lansing is one of five cities to receive the grant funded by Bloomberg Philanthropies. The grant allows Lansing to create the Office of Financial Empowerment, which houses the Financial Empowerment Center. Amber Paxton, who helped write the grant proposal, serves as the office’s director, which was a cabinet-level position.
With three years of strong results, the FEC leaders make a data-driven case to the Mayor and Lansing City Council to secure $60,000 in City of Lansing General Fund dollars. The Office of Financial Empowerment, which houses the FEC, is identified as a potential growth agency.
Expanding beyond the FEC, the OFE begins to administer the Lansing SAVE program. A partnership between the City of Lansing, the Lansing School District, and the Michigan State University Federal Credit Union, the program is initially housed within the City Treasurer’s office. The Office of Financial Empowerment begins administering the program in 2016. The Michigan State University Federal Credit Union takes over day-to-day operations in July 2020.
After Lansing Mayor Andy Schor is elected, his first executive order creates the Department of Neighborhoods and Citizen Engagement. The OFE, which had essentially been operating independently, joins the new department, allowing for increased funding and staff capacity. The FEC thus seeks to deepen its impact among Lansing families.
The OFE, building on momentum from a supportive new mayor and increased institutional capacity, joins the Department of Neighborhoods and Citizen Engagement. With local partners, OFE joins Results for America’s WWC Economic Mobility Initiative. The Initiative provides flexible funding to develop, test, and evaluate the pilot of BOLD Lansing. As part of the Initiative, the pilot program receives design and implementation assistance from the Behavioral Insights Team, including a survey and needs assessment.
The OFE moves its offices and services to a new location in a former elementary school. The OFE is now co-located with Lansing Promise with plans for other BOLD Lansing partners to join later. This arrangement will create better continuity for clients as they move between programs offered by the partners.
Implementation process
How were community members engaged?
Leveraging surveys to inform program design: Before launching BOLD Lansing, the Office of Financial Empowerment surveyed 1,200 K-12 students to determine which types of services the initiative should offer. The survey revealed that students were most interested in strategies for reducing debt and increasing savings. Leveraging these findings, OFE revised BOLD Lansing’s marketing and intake processes to reflect these priorities.
Conducting outreach to understand community goals: As part of OFE’s work on Lansing SAVE, it conducted a survey of and a focus group with parents whose children were enrolled in the program. These outreach efforts were designed to help OFE better understand parents’ awareness of Lansing SAVE and their aspirations for their children.
How did racial equity considerations factor in?
Targeting services to those most in need: In Lansing, as in many American cities, racial disparities in income and wealth persist. Recognizing this problem, the Office of Financial Empowerment collects programmatic data disaggregated by race and ethnicity. These data show that many of OFE’s programs are effectively reaching Lansing’s residents of color. For example, while 24 percent of Lansing residents are Black, about 45 percent of FEC participants identify as Black.
Addressing barriers that disproportionately affect residents of color: Through Lansing Promise, a BOLD Lansing partner, young people in Lansing have access to financial assistance to defray the cost of tuition, books, and course fees at four local postsecondary institutions. Research on similar programs shows that, while Promise programs increase equity in postsecondary enrollment, racial disparities in stop-outs, when a student withdraws from school temporarily, persist. Many of these students are forced to withdraw or drop out from college due to financial emergencies of $500 or less. To tackle this issue, OFE aims to raise funds, so that each student in its Lansing SAVE program will have $500 in their savings account by the end of the 2026-2027 school year.
What were the key activities leading up to and following launch?
Launching the Financial Empowerment Center: To address the growing barriers to higher education and upward mobility, the City of Lansing’s Office of Financial Empowerment is awarded a grant from the CFE Fund to launch an evidence-based Financial Empowerment Center program. The grant is for three years and comes with $1.5 million in start-up funding.
Expanding financial empowerment services: To address a broader range of residents needs, the OFE expanded its programmatic offerings in collaboration with its community partners. These programs include Lansing SAVE, which creates a children’s savings account for each Lansing public school student; Bank On, which helps Lansing residents open safe and affordable bank accounts; and OS Reentry, a program focused on reducing recidivism among formerly incarcerated individuals.
Integrating services to better serve clients: Over time, OFE has worked to integrate the programs under its oversight with each other and with programs offered by partner organizations. For example, clients in OFE’s OS Reentry program now access financial counseling services through its FEC program. Ultimately, this approach serves OFE’s goal of creating a continuum of financial empowerment services for residents to access across their lifetimes, from kindergarten to retirement.
How was the approach funded?
Launching with philanthropic support: In 2013, the CFE Fund awarded the City of Lansing a 3-year, $1.5 million grant to launch the Office of Financial Empowerment and its first program, the Financial Empowerment Center. When the grant period ended, the OFE combined remaining funds from the grant with a new $60,000 investment from the City of Lansing to continue operations into its fourth year. The CFE Fund continues to provide the Lansing OFE with free access to its financial empowerment counseling software.
Continuing operations with city funding: Today, the OFE funds its operations and personnel with roughly $1.2 million per year, about $630,000 of which is dedicated toward the FEC and Lansing SAVE. Those funds come from Lansing General Fund allocations and HUD Community Development Block Grant funds. The office currently employs four full-time staff, with three additional positions planned for 2024.
BOLD Lansing and What Works Cities: As part of Results for America’s What Works Cities Economic Mobility Initiative, BOLD Lansing received roughly $125,000 in flexible funding to launch and advertise the program. The program used the funding to hire a local designer (Redhead Design) to build, rename, and rebrand the website. It contracted with Public Sector Consultants to provide back-end administrative support, marketing, and to develop a governance and sustainability plan. BOLD Lansing also receives pro bono technical assistance from the Behavioral Insights Team as part of the Initiative.
Leveraging ARPA funding: The City of Lansing allocated over $200,000 in American Rescue Plan Act funding to OFE. These funds will cover marketing costs for the Financial Empowerment Center and support additional new programming. The United Way of South Central Michigan also received ARPA funding to purchase a bus to serve as a mobile VITA tax clinic. As a partner of United Way, OFE will also offer BOLD Lansing services through the mobile tax clinic beginning in 2024.
How was the approach measured and refined?
Data-informed counseling: For its FEC program, OFE utilizes sophisticated software provided by the CFE Fund to collect and analyze clients’ financial data. This analysis helps counselors develop individualized guidance and financial strategies for clients. For instance, the software allows the OFE to develop client-specific debt reduction and restructuring plans directly with their creditors.
The impact of COVID-19: The OFE has carefully tracked the impacts of COVID-19 on its clients to help FEC counselors prioritize the most urgent financial strategies and tactics. The OFE’s internal COVID assessment indicates that 29% of FEC clients applied for COVID benefits, and 32% have lost at least some of their income.
Integrating OFE programs into 311 services: In 2022, the City of Lansing’s Department of Neighborhoods, Arts, and Citizen Engagement launched a 311 call center. The call center allows residents to call a single phone number to access services across a range of city departments. Later in 2024, OFE services will be integrated with the call center, enabling residents to schedule appointments for these programs by calling the 311 hotline.
Bringing FEC counseling in-house: After successfully launching the FEC program through partnerships with nonprofit providers, the OFE is relaunching the FEC as a fully city-run program in 2024. This change will enable OFE to offer FEC financial counselors greater compensation, which may aid recruitment and retention efforts. Additionally, by bringing FEC programming fully in-house, OFE will be better positioned to integrate FEC with other services it offers, like Lansing SAVE.
Co-locating with a partner organization: OFE now operates out of the same building as Lansing Promise, a local post-secondary scholarship program. By co-locating, OFE and Lansing Promise can offer residents a “one-stop shop” for a wide-range of financial empowerment services, including tax assistance, FAFSA assistance, financial counseling, and more.